With no regular income, retirees prioritize capital preservation and generating a stable, dependable income stream from their investments to cover living expenses. In this context, dividend-paying stocks with strong fundamentals and a long track record of reliable payouts can be particularly attractive. Against this backdrop, let’s assess whether Bank of Nova Scotia (TSX:BNS) or Enbridge (TSX:ENB) might be better suited for retirees seeking income and stability.
Bank of Nova Scotia
Bank of Nova Scotia provides a wide range of financial services across multiple countries. Thanks to its diversified revenue base, the bank generates stable, reliable cash flows, enabling it to maintain and steadily increase its dividend. Notably, BNS has paid dividends without interruption since 1833. Over the past decade, the bank has increased its dividend at a compound annual rate of 4.73% and currently offers a solid yield of approximately 4.28%.
Operationally, BNS delivered an impressive fourth-quarter performance last month, with revenue rising 15% year over year to $9.8 billion. This growth was driven by a 17% increase in non-interest income and a 13.5% rise in net interest income. Higher contributions from associated companies such as KeyCorp, along with increased wealth management revenue, underwriting and advisory fees, and banking fees, supported non-interest income. Meanwhile, an improved net interest margin, loan portfolio expansion, and favourable currency translation boosted net interest income. Reflecting these healthy operating trends, adjusted earnings per share increased 22.9% to $1.93.
In addition to improved operating performance, BNS has strengthened its balance sheet and enhanced its loan-to-deposit ratio, positioning the bank well for long-term growth. Management is also prioritizing expansion in lower-risk North American markets while scaling back less profitable or higher-risk operations in Latin America. This strategic reallocation should streamline operations and enhance overall profitability. As a result, BNS’s long-term growth outlook appears solid, reinforcing its appeal as a dependable income stock for retirees.
Enbridge
Enbridge is a diversified energy infrastructure company that transports crude oil and natural gas across North America under long-term, take-or-pay agreements and a tolling framework. In addition, it operates three regulated utility assets and a portfolio of renewable energy projects supported by long-term power-purchase agreements.
Approximately 98% of Enbridge’s adjusted EBITDA is generated from regulated assets or long-term contractual arrangements, with about 80% indexed to inflation. As a result, the company’s financial performance is less sensitive to economic cycles, enabling it to generate stable and highly predictable cash flows. Supported by this resilient cash flow base, Enbridge has paid dividends uninterrupted for more than 70 years and has increased its dividend for 31 consecutive years. At present, the stock offers an attractive forward dividend yield of around 6.06%.
Looking ahead, the Calgary-based energy company continues to advance its $37 billion secured capital program, with projects expected to enter service over the next four years. Enbridge plans to invest approximately $9–$10 billion annually to fund these initiatives. Backed by these growth investments, management expects to return $40–$45 billion to shareholders over the next five years, reinforcing the sustainability and long-term growth potential of its dividend.
Investors’ takeaway
Both companies boast excellent track records of dividend payments and consistent dividend growth. However, I am more bullish on Enbridge due to its longer streak of dividend increases, higher yield, and greater visibility into future growth initiatives. These attributes make Enbridge a particularly compelling choice for retirees seeking dependable income and long-term stability.
